In a recent development concerning the financial affairs of the Congress party, the Income Tax department clarified its stance before the Income Tax Appellate Tribunal (ITAT), stating that it had not issued any directive to freeze the transactions in Congress' bank accounts. The clarification came amidst assertions of freezing by Congress leaders.
Clarification by IT Department
According to an order issued by the ITAT on February 16, the Income Tax department informed the tribunal that it had solely placed a lien, not an order for freezing, on the amount in the accounts to offset the pending tax demand. The order elucidated the distinction, specifying that a lien represents a legal claim against an asset, often serving as collateral until the obligation is discharged.
The ITAT order quoted, "The Revenue (IT) does not claim to have issued any order or direction to the concerned bank(s) for freezing the transactions in the bank account(s), but only for a lien on the amount lying in the bank account(s) up to the outstanding tax demand."
Request for Stay and Further Proceedings
During the proceedings, senior counsel and Congress leader Vivek Tankha requested an opportunity for an in-person hearing and sought a stay on the order attaching the party's bank accounts. Tankha, appearing virtually due to being out of station, emphasized the need for a comprehensive hearing.
Congress' Perspective and Allegations
Congress leader Ajay Maken alleged that the Income Tax Department had frozen four bank accounts of the party and the Youth Congress, citing a demand of Rs 210 crore related to the income tax return case of 2018-19. He underscored the potential impact on the party's activities, especially campaign efforts for the impending general elections, if the freeze persisted.
Future Proceedings
Following the ITAT's decision permitting Congress to operate the bank accounts with a lien, the case is slated for a detailed hearing on February 21. Tankha highlighted the urgency of relief, expressing concerns over the party's financial constraints in light of the ongoing freeze.
Conclusion
The recent developments underscore the intricacies surrounding the financial dispute between the Congress party and the Income Tax department. While the IT department maintains its stance of imposing a lien rather than freezing accounts outright, the case continues to unfold, with Congress leaders advocating for relief and further deliberations on the matter scheduled in the upcoming days.
CAclubindia
